Virginia

Virginia surpasses revenue forecasts with a $1.2 billion surplus in fiscal year 2024

Richmond, Virginia – Governor Glenn Youngkin recently announced a significant fiscal achievement for Virginia, with the state’s general fund revenues for fiscal year 2024 surpassing the official revenue forecast by $1.2 billion. This surplus highlights the effectiveness of the state’s economic policies and marks a positive trajectory for its financial health and strategic investments.

Financial Windfall Supports Critical Investments

For fiscal year 2024, Virginia experienced robust growth in overall general fund revenue collections, which grew by 5.5%, significantly outstripping the conservative estimate of a 1.3% increase set in the official forecast. This forecast had already adjusted for $525 million in excess revenues collected through April, as well as $22 million related to adjustments for the military retirement income tax subtraction.

The surplus of $1.2 billion has been crucial in fully funding contingent spending on key priorities outlined in the enacted budget. Among the beneficiaries is the Virginia Military Survivors and Dependents Education Program (VMSDEP), which received an additional $90 million in funding thanks to the surplus. This program is vital for providing educational opportunities to the families of military personnel affected by service-related circumstances.

Governor Youngkin expressed optimism about the state’s financial health, linking it directly to strong job growth and strategic fiscal management. “Preliminary year-end results demonstrate that robust job growth produces record revenues that allow us to make continued investments in shared priorities,” Governor Youngkin stated. He emphasized the state’s ability to fund critical projects while still managing to cut taxes, thereby reducing the cost of living for Virginians.

Exceeding Expectations and Funding Future Projects

Secretary of Finance Stephen Cummings noted that the fiscal performance exceeded not only the latest estimates but also outperformed projections from December 2023 by $1.7 billion. This outstanding financial performance ensures sufficient funding for major state initiatives, including accelerating improvements to Interstate 81, enhancing water quality in Chesapeake Bay, and upholding commitments to educational programs for military heroes and their families.

The surplus is primarily attributed to increased net individual income taxes and higher-than-expected sales and use tax collections, although these gains were slightly offset by lower than anticipated corporate income tax revenues. Key contributors to the surplus included individual income nonwithholding collections and refunds, which alone added $1.1 billion to the surplus, partly due to the timing of receipts and refunds associated with the elective Pass-Through Entity Tax (PTET).

Additionally, payroll withholding saw a growth of 4.8 percent, surpassing the forecasted growth rate of 3.8 percent, while sales tax collections modestly decreased by 0.5 percent, performing better than the forecasted 4.6 percent decline. In contrast, net corporate income tax collections fell by 6.1 percent, which was a departure from an anticipated 9.0 percent increase, primarily due to the timing of refunds.

Governor Youngkin is scheduled to provide a complete accounting of all final revenue sources after the final year-end close. This detailed report will be released on August 14th during his address at the Joint Money Committee Meeting, providing a clearer picture of Virginia’s fiscal landscape and paving the way for informed decisions about future economic policies and investments.

Donald Wolfe

Donald’s writings have appeared in HuffPost, Washington Examiner, The Saturday Evening Post, and The Virginian-Pilot, among other publications. He is a graduate of the University of Virginia. He is the Virginian Tribune's Publisher.

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